Asked to quantify the sales potential in China's vast luxury car market, Musk replied that industry analysts probably know more about it than he does. "I haven't got some magic crystal ball." That said, he says Tesla is not struggling with a demand issue in China. His advice to the Tesla China team is to "spend money as fast as they can spend it without wasting it."

6:18 pm | Tesla stock looking at 3-month lows | by Laura Mandaro

Shares are down 7% to $187.58. If it opens at these levels Wednesday, it will trade at its lowest in three months.

6:15 pm

On capital spending in 2015, CFO Ahuja said it's still too early to offer guidance, but clearly it will include a shift in spending to the Gigafactory. He said they will perhaps be able to provide a better idea a couple of quarters from now. As spelled out in the first-quarter report, spending in 2014 is expected to be between $650 million and $850 million.

6:14 pm

Musk is explaining chemistry and physics to Wall St. analysts. Good luck, buddy,

Asked about whether basic weaknesses with the electrical grid in China is prompting some customers to cancel orders, Musk said "No." However, he said they are in some cases planning to place several recharging stations within Chinese cities rather than between cities, which is the more typical North American and European model.

6:04 pm

Back to the Model X -- Musk says focus is moving to the X now that the Model S sedan is well in hand. Aims to roll it out in Q2 2015, but says the production ramp will be much steeper than with the Model S. "That means it's really important that we've validated all issues ... before ramping up production." Says they really want to avoid recalls.

5:57 pm

CFO Ahuja, asked about R&D spending level: "I expect it to be in the high double-digits" while developing new models/battery production.

5:55 pm

Musk: "Panasonic would be the only one producing battery cells in the Gigafactory." But if Panasonic can't meet demand, Tesla would tap other producers.

5:52 pm | Tesla shares coming off lows after hours | by Laura Mandaro

Was down more than 8%, now down a bit over 7%.

5:52 pm

Morgan Stanley: Followup to Gigafactory…Musk says moving forward to break ground on several sites. “We expect to break ground on the first probably next month, and probably a month or two on the second one …. and California is potentially back in the running.” That said, timing is crucial, and California has a lengthy approval process for greenfield projects. So maybe, California. But only if you can streamline your permitting process. Over to you, Gov. Jerry Brown.

(photo credit: AFP/Getty)

5:47 pm

"The mining guys are super happy to hear from us."

5:47 pm

Asked about the lithuim-ion battery "Gigafactory" , Musk says they've got a letter of intent signed by Panasonic. Also created a joint development team. Aiming for a final agreement later this year. Again touts the cost-reduction posed by making its own batteries. Biggest cost is nickel - and are the company is in talks with several nickel producers, including miners in Canada.

5:42 pm

Musk says ensuring a great "customer experience" is dictaing the pace of rollout in China, and that means service centers must be in place before ramping up deliveries, in China or any other market.

5:38 pm | Blown away by China | by Jim Jelter

First question from Barclays: What’s the China order book look like? To which Musk replies he’s “blown away” by goodwill China.” He adds that Tesla is trying to expand its service centers “as fast as possible in China … we really are doing very few stores … the focus is 90% on service centers and superchargers.” Admits the only source of unhappiness in China is that customers in mid-size cities are having to wait for delivery longer than they’d like. They are not getting their cars soon enough.” Wait time there can be as long as four months.

5:33 pm

Tuned in and waiting for the conference call to begin to the strains of classical music.

And here we go - on the call: Founder, Chairman and CEO Elon Musk and CFO Deepak Ahuja.

5:32 pm | Tesla down 7.6% | by Laura Mandaro

The stock has fallen more as the after-hours session has waxed on. It's now down 7.6%, or $15.01, to $186.34 a share.

"Once you own a Tesla, you’re not likely to part with it — unless you sell it, that is. Last year, only three Teslas (one in San Francisco, one in Los Angeles and one in San Diego) were reported stolen in the U.S., according to data from the National Insurance Crime Bureau . In 2012, none were reported stolen, and in 2011 just one was stolen (in New York)."

And then there’s the steep, though not unexpected, rise in costs associated with Tesla’s ambitious growth plans this year. The company takes direct aim at this in the first line of its quarterly report: “This year we are engaged in the most rapid expansion in Tesla’s history.” Great. Capital expenditures hit $141 million in the first quarter and the company said it still plans to spend $650 million to $850 million for the full year. At the same time, it admits it’s facing a “slightly” negative free cash flow for 2014. How much is “slightly”‘?

4:58 pm | Simple old profit-taking | by Claudia Assis

Some of the selloff may be down to simple old-profit taking. The report, after all, wasn’t that bad.

Tesla shares have gained 262% in the past 12 months, and 34% so far this year. Shares took off in March on the expectations surrounding the ‘gigafactory,’ but have since cooled off, down 3.4% this quarter. Its P/E ratio? 118 times.

4:56 pm | Another shadow: Gross margins | by Jim Jelter

Another thing investors might be fretting over: Tesla confidently stated three months ago that it’s aiming for a 28% automotive gross margin by the end of the year. Here’s the updated version from today’s report: “We expect non-GAAP automotive gross margin to increase slightly from Q1 to Q2. As manufacturing efficiency and part costs continue to improve, we believe a 28% non-GAAP automotive gross margin by Q4 of this year is still an achievable target.”

So, is the company hedging a bit? Tough to say. They narrowly exceeded the 25% target they set for themselves in 2013, so they’ve got a proven track record. But lacking further explanation ahead of the conference call, some of the usual swagger seems to be missing.

4:47 pm | Full text of shareholder letter | by Tom Bemis

Here's the full Tesla Shareholder letter:

4:46 pm | MarketWatch's Hall calls it | by Laura Mandaro

Looks to me like $TSLA has bottomed and bargain hunters are moving in.

So, with top line first-quarter revenue up over 10% from a year ago, an adjusted profit of 12 cents a share (beating the 8 cents a share analysts expected) and vehicle production apparently on track to hit 35,000 in 2014, why is the stock down 5%?

A couple of items stand out. Tesla said the battery supply bottleneck will continue to constrain production in the second quarter. This could jeopardize production targets down the road. This is worrisome given that the 6,457 vehicles it delivered in the first quarter was a bit shy of the 6,600 some analysts expected.

Leasing is another concern. According to the company, lead times between vehicle orders and deliveries will limit leases to a paltry 200 cars in the second quarter. That means a lot of cars ordered in the second quarter won’t be delivered until the third quarter.

4:45 pm | Tesla stock performance on earnings days | by Tom Bemis

Here's what Tesla stock did on the day of and the day after its last 15 earnings reports:

Report Date

% chg on report date

% chg report date +1

2/19/2014

-4.94

8.43

11/5/2013

0.92

-14.51

8/7/2013

-5.57

14.34

5/8/2013

0.50

24.40

2/20/2013

-1.88

-8.77

11/5/2012

8.93

-1.11

7/25/2012

-2.98

-2.83

5/9/2012

-0.43

9.65

2/15/2012

1.30

1.73

11/2/2011

-0.59

13.06

8/3/2011

-0.51

-9.01

5/4/2011

-0.67

-0.94

2/15/2011

-1.04

8.27

11/9/2010

-1.40

19.20

8/4/2010

-3.14

-3.81

4:45 pm | Twitter react: what the..? | by Laura Mandaro

Lots of confusion on why the stock is dropping after earnings, sales beats and deliveries topping company forecasts.

A taste:

Ok...I'm on the record as a $TSLA bear, but today's after-hour collapse is shocking even to me.

Tesla says it’s going ahead with plans for its huge battery factory. From the shareholder letter: The Gigafactory project is on course to begin battery cell and pack production in 2017. We have not yet finalized the ultimate location for the Gigafactory and we are going to start work on at least two locations in parallel in order to minimize risk of delays arising after groundbreaking.

4:15 pm | Q2 delivery forecast: 7,500

Stock is down 5% now.

Sales rose to $620.5 million vs. year-ago $561.8 million

Tesla also said it expects to deliver 7,500 vehicles in the second quarter.

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